Utilities face new challenge in rush for home storage

Australian electricity utilities face a new challenge from a fast-growing interest from Australian households in home energy storage. One in five solar customers now inquiring about storage, and returns on investment are soaring as costs come down.

Australian electricity utilities face a new challenge from a fast-growing interest from Australian households in home energy storage.

Numerous companies are poised to roll out home energy storage solutions in coming months, and all solar installers and distributors report a growing rate of inquiry about battery storage.

Michael Anthony, from solar distributor and systems aggregator Solar360, says between 15 and 20 per cent of solar customers are asking about storage, and that rate is increasing each month.

According to his estimates, the annual rate of installations of battery storage in Australian homes could reach around 1,000 by the end of the year, but this is just scratching the surface of the market.

Australia currently has around 3.4GW of solar PV on household rooftops (and some businesses), but this is expected to rise six fold out to 2030 as households invest another $30 billion on household solar systems.

Many of these installations will look at battery storage because of the structure of tariffs and decisions by network operators, retailers and pricing regulators.

The decision by regulators to assign a low “value” of solar exports, and to make such payments voluntary in some jurisdictions, is forcing homeowners to look at how to “self-consume” their solar output rather than export it back to the grid. Battery storage is an obvious option.

Recent decisions by network operators Ergon Energy and Energex to place restrictions on rooftop solar systems exporting back into the grid will do the same. Ergon Energy says it is inevitable that households will turn to storage, mainly because it is cheaper than the unsubsidised delivery of centralised power. It will also save the network operator money because it won’t have to build so many poles and wires.

But it’s not just those in rural and remote areas, in new subdivisions or facing massive connection costs for new homes in semi rural areas that are looking seriously at storage solutions.

The city is also full of “early adopters”, those who take up technology at the early stage of the cycle, as happened with solar before the tariff-charged boom of recent years.

“Everyone is talking about energy storage systems, it just makes sense,” Anthony says.

As electricity bills increase, the costs of solar plus storage are falling. Anthony estimates that the starting price, even for homes in the city, is below $30,000, all inclusive.

But it’s not just the economics that are driving customers, Anthony says, it is also frustration with bills, and utilities, and the desire to do something good, and to be independent.

“It’s such a romantic idea – you store energy during day, you deploy at night, and the systems look like the bees-knees.”

Solar360 on Monday launches a new product suite, training program and website that allows systems to be properly sized for the needs and resources of households and businesses.

Anthony said recent experience showed it was clear that one type of product would not meet the market, and various options were required to fit the market place.

The new suite includes a “city” option, that allows homes in the cities to store energy but remain connected to the grid, a “back-up” option, that essentially allows households to go off grid, and an “integrated” option.

Over a 15 year period, the “city” solution is offering returns on investment of between 18 and 27 per cent – and that includes a storage replacement within that time frame.

The back-up solution offers returns of 15-19 per cent, he says.

Lithium-ion batteries, normally priced at around $1,000/kWh, are now priced as low as $630/kWh.

“We have teamed up with a range of (inverter and battery storage) manufacturers such as Schneider, BYD, SolarX, PylonTech, and Nerada,” he said.

Telecommunication companies, such as China giant ZTE, are also entering the market.

“Welcome to the new world,” Anthony said. “That’s why we are launching this on Bastille day. Vive la revolution.”

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of The Driven. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of The Driven. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

The longer the Abbott Government stalls Australia’s inevitable transition away from fossil fuels, the greater the rate that utility customers move away from the grid. Some of the highest retail electricity prices in the world couple with Australia’s high solar radiation to ensure that solar with storage will rapidly become a very commercial option to many rate payers in Australia.

barrie harrop 5 years ago

Abbott,still thinks Aust need more dirty coal fired energy plants .

RobS 5 years ago

I would support some new coal plants if they replaced our oldest least efficient ones. For example I would have little issue with Hazelwood’s horrifically filthy 1500Mw being replaced with a state of the art 300Mw Coal plant with the remainder replaced with renewables +/- storage and efficiency. Something on the order of a replacement of our oldest coal fleet with 20% coal, 80% everything else. Keeping in mind that newest technology coal plants use 25% less coal for the same output so those 20% new coal plants would mean coal consumption would drop to only 15% of current levels. I think aiming for 20% coal contribution will be about the right target for about 30-40 years, the life of a newly built plant, and as such would allow the shuttering of all but the few newer coal plants in Australia.

barrie harrop 5 years ago

Once home storage reaches payback periods of say 3-4 years ,start selling your shares in any company that owns poles/wires asap–there is going to be lots of stranded assets.

3.2V 100Ah LiFePo4 from EV supplier costs around $130.. that’s roughly $400/kWh.. still needs BMS, housing, etc.. Direct import for single cells from CALB are in the same range currently.. so we’re not there yet.

Pied 5 years ago

You guys continue to miss the point. The buy price is just one factor. More important is the cost of each kWh extracted from the batteries which includes also the BMS in the case of lithium’s. The reason I chose opzv vrla batteries is their cycle life and float life. Buying flat plate AGM deep cycle batteries also won’t cut the mustard, their cycle life is a lot lower than a opzv so when you divide the cost of each cycle they are not as cost effective a opzv. I know of a opzv brand that is selling for $390.00 kWh retail including gst. A typical opzv will be optimized at about a one third dDod to optimize it at the float life of 15 years. So $390.00 divided by 5000 30% discharges = $0.078 then times by 3 to give the kWh rate you get $0.238 per kWh . You then need to add the cost of the grid tie battery inverter and a housing for the cells, labour, markup etc. You will find that it still costs more than buying power from the grid in most places except some areas and their peak charges (Sydney). I will state it again Lithium are still 3 times the cost for quality cells plus the BMS at the retail level. At this stage based on value it is a waste of time and capital. It’s marketing hype and desperation by people to find the next big thing. I remember people spending $20k on a 1.5 kW solar system, so sure there will always be a market albeit a small one until the battery cost comes down and or power prices continue to grow.

nakedChimp 5 years ago

I can only find ~1600 cycles at DODs of 60% and around ~3500 for DODs of 30%, are you really sure those ‘economy’ OPvZ cells of yours gonna last those 5000 cycles at 30% DOD? (example: http://www.systems-sunlight.com/uploads/image/2V_5_OPZV_350.pdf) Also, GEL LAB batteries are the most fickle of them and need to be treated very very carefully to not cause any damage to the GEL while charging or discharging them (bubbles in there aren’t repairable). AGMs are more forgiving in this regard, especially VRLA, but overall as forgiving as LABs might be the tech is maxxed out and at the end of it’s life-cycle.

I personally don’t know if the LFPs I got here will last those 2-3k cycles at 70-80% DOD, but I will try. Also a BMS for them isn’t that costly at $10-20 per cell.. most of them just divert some of the charging energy around the first cell to reach full and after a while will give the signal to the main controller to cut off charging (another $100-200). Then there is more sophisticated ones that on top of that will balance the cells to keep em on the same level all the time… All in all I won’t spend that much more over LABs and for others the price of the tech will come down in the next years and the lessons will be learned by then.

In my eyes, LABs would need this balancing/monitoring treatment as well, but nobody cares as there the damage from not doing this is way less pronounced and for WET LAB one just has to boost them and top of the water from time to time (not advisable for GEL).

So while you enjoy your OPvZ tubular VRLA LABs I will have some fun with LFPs – no harm, no fault 😉 Stay safe.

Pied 5 years ago

$300kwh does not include the charge control system and are for basically rubbish. The correct way to figure this out is cost versus kWh that can be extracted I the lifetime of the battery/system including any of the electronics to control the charge. Since storage at a residence doesn’t necessarily need small and light like in a electric car a opzv tubular plate lead acid still works out at less than half the cost on this basis(per kWh extracted) over the life cycle of the battery. The article and most of the responses show a complete lack of understanding on battery technology let alone batteries like Lipo. Cheap rubbish out of china does not a battery make. Don’t believe me, just ask Boeing and the top end batteries they installed in their new Dreamliner, what a cluster fuck, with all their thousands of engineers it still caught on fire. If you think some back yarders or wholesalers in Oz are going to get it right you are sadly mistaken. It will take someone like tesla and Panasonic to make a large scale factory with extremely tight tolerances and superb design to get the prices down and more importantly get the package right . I have 30 years experience in the battery industry in particular their use in storage and hybrid system including various lithium technologies so hopefully know a bit about the subject.

nakedChimp 5 years ago

..where do you buy deep cycle ‘opzv tubular plate lead acid’ batteries for $200 per kWh extracted (so $100 per kWh battery name plate)? I can buy here 6V 230Ah AGM Deep Cycle for about $275 a piece, that’s $200 per kWh for nameplate, would be $400 per kWh extracted at 50% DOD. What do I do wrong?

*) prices in AUD

Pedro 5 years ago

With you on this one Pied. Quality OPzV gel batteries work out to be about $600/kWh to %50 DOD excluding all the control gear to make it work. Possible to get it down to $300/kWh with cheaper product, but you don’t get the warranty or life.

There are backyarders and enthusiasts out there mucking around with some very interesting and potentially dangerous systems. Eventually they will crack that nut.

Gary Phillips 5 years ago

It will need some streamlining of Energex approval policies as soon as possible. At the moment if you tick the box for storage batteries it goes in the further evaluation area and takes 65 business days! Not at all what is needed in this rapidly expanding area. Gary Phillips – Negawatts Solar & Electrical – Maleny, Qld.

boondoggle9945 5 years ago

So, 18.1 average KwH per day times $630 equals $11,403. Plus other electronics and the solar panels. Plus the cost of new deep cycle batteries as they wear out and have to be replaced (assume about 5 years) and also the old ones disposed of. That needs to be added to the cost to see when the payback period will be. In a rural area it may make sense, not so much in an urban setting. You also need to consider the environmental cost of manufacturing the solar panels (lots of toxic chemicals, etc – though they are disposed of in China – so why should we care) and the environmental costs of mining and manufacturing the batteries and then disposing of them at the end of their life time (but again that probably happens some where else so why should we care).

nakedChimp 5 years ago

You ever heard of recycling? For LAB it’s close to 100%. Lithium batteries can be similarly recycled. LAB have a lifetime of about 1500-2000 cycles at 50% DOD, Li batteries have 2000- 3000 for DODs of 80-70%. How often you need to cycle and how deep depends on you setup/system design. Li batteries need more safety during operation than simple LAB designs, but LAB GEL batteries need to be treated with similar efforts.

PV panels last 25 years+.

Next, you don’t need 20kWh energy storage to use more energy from your solar panels. 3kWh will be enough for most, unless you go off-grid, which won’t happen for 95% of currently grid connected – especially not for $600/kWh storage.